Star Power?

This story appears in the April 2007 issue of Entrepreneur. Subscribe »

If you dream of styling your company after, say, Dell Inc. and experiencing Michael-like glory, say hello to the Halo Effect. This potentially dangerous delusion frequently occurs when we attribute a company's success to its visionary leadership, superb corporate culture or other attribute, says Phil Rosenzweig, author of The Halo Effect (Free Press, $25). In fact, Rosenzweig maintains, it's equally if not more likely that we consider a company's leaders visionary and its culture top-notch because of its success, not the other way around.

Rosenzweig, a professor at Switzerland's International Institute for Management Development, considers just about all writing on business seriously defective. The near-ubiquitous Halo Effect is frequently joined by errors such as the Delusion of Lasting Success, which holds that companies can achieve continuing success when, in fact, most front-runners eventually slide back to the middle of the pack. The questions Rosenzweig raises about entrepreneurial superstardom don't have good answers, but the issues themselves are illuminating.

Bright ideas
Many entrepreneurs know or suspect they have valuable intellectual property, but few know the difference between utility patents and design patents. In From Edison to iPod (DK Publishing, $30), top intellectual property lawyers Frederick W. Mostert and Lawrence E. Apolzon break IP down to the basics. They start with two golden rules, the first of which states that the first company to file a patent or use a trademark owns it. Of great interest to entrepreneurs is the second rule, which says that ideas are not protect-able; if you have an idea for a product, you must create the product to have anything of value. So make that prototype and start your business.

Mark Henricks is Entrepreneur's "Staff Smarts" columnist